TY - JOUR
T1 - Bad banks choking good banks
T2 - Simulating balance sheet contagion
AU - Khalil, Saed
AU - Kinsella, Stephen
N1 - Publisher Copyright:
© 2015 Edward Elgar Publishing Ltd.
PY - 2015/4
Y1 - 2015/4
N2 - We investigate the propagation of contagion through banks’ balance sheets in a two-country model. We simulate an increase in non-performing loans in one bank, and study the effects on other banks and the macro-economy of each country. We show that credit crunches destabilize each economy in the short run and in the long run reduce potential output. We quantify this loss.
AB - We investigate the propagation of contagion through banks’ balance sheets in a two-country model. We simulate an increase in non-performing loans in one bank, and study the effects on other banks and the macro-economy of each country. We show that credit crunches destabilize each economy in the short run and in the long run reduce potential output. We quantify this loss.
KW - Contagion
KW - Credit crunch
KW - Stock-flow consistent models
UR - http://www.scopus.com/inward/record.url?scp=85039961409&partnerID=8YFLogxK
U2 - 10.4337/ejeep.2015.01.06
DO - 10.4337/ejeep.2015.01.06
M3 - Article
AN - SCOPUS:85039961409
SN - 2052-7764
VL - 12
SP - 51
EP - 72
JO - European Journal of Economics and Economic Policies: Intervention
JF - European Journal of Economics and Economic Policies: Intervention
IS - 1
ER -